June 10, 2016 Update

Money, time, and happiness

A couple of recent articles struck our fancy by talking about the link between money, life “efficiency”, and how all that relates to our happiness. At the bottom, we have a link to an article from The Economist magazine talking about the impact Amazon is having on Wal-Mart. One sentence from that article resonated as being really about the life and happiness of their customers:

“What Walmart did for Americans’ wallets, Amazon is doing for their time.”

It seems there is an increasing view in certain segments of the population that acquiring money and wealth, while obviously valuable, is not the ultimate goal. Instead, money as a means to an end of more free time, the ability to pursue more of our interests, have more flexibility, better health, et al. is really what this game is all about. Indeed, successful entrepreneur Mark Cuban has stated: “Time is the most precious commodity. Time is more valuable than money. How effectively you manage your time will have far more impact on your success than any amount of money.” Amazon (and many other companies these days) focuses on giving us access to a shopping experience that is a more efficient use of our time, in addition to being about cheaper and of greater value. The value is in the efficiency and the time we save. To some degree, that is also the premise behind the coming revolution in driving. Self-driving cars will ultimately free up our time in addition to making us safer and extending our life satisfaction.

We bridge from the retailing revolution’s focus on giving customers more time as a way to give them more ‘happiness’ to the article below from former Wall Street Journal columnist Jonathan Clements talking about his upcoming book, which considers as a key topic the intersection of money, investing, and the pursuit of happiness. We particularly connect with Step 5 as our core philosophy is to protect our wealth by “not losing”, not suffering the damage the market can throw at us which leads us to win and grow our wealth in the long-run.

Herewith is that article which essentially provides a brief overview of the book:

“There are those who think the goal is to beat the market and amass as much wealth as possible, that street smarts and hard work ensure investment success, and that the road to happiness is paved with more of everything.

And then there are those who get it.
Want a more prosperous, less stressful financial life? How to Think About Money, scheduled for publication on Sept. 1, 2016, is here to help. The book’s goal: to provide readers with a coherent way to think about their finances, so they worry less about money, make smarter financial choices and squeeze more happiness out of the dollars that they have. How to Think About Money focuses on five key steps:

Step No. 1: Buy More Happiness. There is a connection between money and happiness, but the relationship is far messier than most people imagine. If we want to get the most out of our dollars, we need to think much harder about how we spend and which goals we pursue.

Step No. 2: Bet on a Long Life. Most of us will enjoy an amazingly long life that will often see us pursue more than one career and spend perhaps 20 or 30 years in retirement. That has big implications for how we handle our money.

Step No. 3: Rewire Your Brain. Thanks to the instincts we inherited from our hunter-gatherer ancestors, we are hardwired to fail both as savers and as investors. Result: It takes great self-discipline or, in the absence of self-discipline, a certain amount of self-deception-to manage money successfully.

Step No. 4: Think (Really, Really) Big. We divvy up our financial life into a series of buckets, thinking of our insurance policies as separate from our bank accounts, and our stock-bond investment mix as unrelated to our debts. But to manage money prudently and make the right tradeoffs, we need to bring together all of these financial pieces-and the central organizing principle should be our paycheck, or lack thereof.

Step No. 5: To Win, Don’t Lose. To get ahead financially, we should think less about making our money grow and more about the dangers that could derail our financial future. This doesn’t mean we shouldn’t take risk by, say, investing heavily in the stock market or taking on a hefty mortgage to buy our first home. But even as we save and invest for the future, we should also aim to minimize potential subtractions from our wealth. Those subtractions might appear modest, like mutual fund expenses and stock trading costs, or they can be huge, such as selling shares at a market bottom or becoming disabled and yet not having disability insurance. Either way, there’s the potential for great financial damage.”

Amazon forces Wal-Mart to innovate… yet again

Here is the article noted above that details some of the battleground between Amazon and Wal-Mart as they encroach ever-further on each other’s market space. If you cannot access the article via the link below, let us know at support@timingcube.com and we will be happy to send you a pdf version.

Market Update

Stocks jumped +0.5% to begin the week with the S&P 500 clearing the 2100 level as investors continue to believe the prior week’s poor employment report will prevent the Fed from acting soon to raise interest rates. Stocks investors continued to look for new catalysts to push indexes to new high ground. Tuesday offered nothing new though stocks managed to hold flat after Monday’s gain while oil prices wandered further above $50 per barrel. Stocks added a third day of modest gains with a +0.3% rise Wednesday. The U.S. dollar continued the weakness seen since the labor report – a move which has been driving commodity and international markets upward.
Another quiet session Thursday though slightly negative in tone as reports from Korea and China splashed a little cold water on commodity prices to cool the rally in emerging markets. Still, the U.S. indexes only dipped -0.2%. A poll showing a majority of British citizens leaning toward voting to leave the European Union rattled markets Friday sending the U.S. dollar higher and stocks lower as investors sought safety in government bonds. The vote for the British referendum is June 23rd.